Here Are 6 Reasons Why Stocks Are Hitting New Record Highs Today

The Dow Jones Industrial Average and S&P 500 are on their way to close at new highs.

The Dow actually set a new intraday high of 16,699.55 earlier today. On Friday, the Dow set an all-time closing high of 16,583.34.

The S&P 500 is above its record closing high of 1,890.90, which occured on April 2. Currently, it's just 2 points from its all-time intraday high of 1,897.28.

The Nasdaq is having a huge day surging by 1.7%. The bruised up high-growth, momentum stocks are bounding with TripAdvisor up 6.1%, Salesforce.com up 5.8%, Netflix up 4.3%, and Facebook up 3.5%. Biotech giants Regeneron Pharmaceuticals and Alexion Pharmaceuticals are up 4.5% each.

You'll have a tough time singling out one thing driving today's rally.

1) The short sellers clearly piled-on the big momentum/high beta names last week. Friday afternoon's reversal in these deeply wounded stocks continued with a vengeance this morning as we're seeing a bit of short squeeze occurring. Momentum names have finally found some stability as the shorts are taking their lumps.

2) Bonds yields are higher across the globe as investors pull back on the 'flight-to-safety trade' and add to risk positions. The 10-year US Treasury yield is safely above 2.60%, now at 2.652%.

3) Stock indices across Europe, China and India had a strong showing overnight.

5) Profits from the current reporting period have exceeded expectations, while the outlook for the U.S. economy appears to be increasingly positive. (Also, forward guidance has been broadly positive for the remainder of 2014.)

6) The global economy is accelerating, central banks are dovish, companies are making acquisitions and it’s hard to see what could keep the market down from current levels.

Another bullish force comes from India, which is in the process of wrapping up the biggest election in history. According to new exit polls, Narendra Modi is set to become the country's next prime minister.

Modi is widely known as the pro-growth candidate. But some experts warn that we're all being a bit too optimistic.

"He's selling a dream," said Ruchir Sharma, head of emerging markets and global macro at Morgan Stanley Investment Management. "We don't have specifics as yet."

It's worth pointing out that indexes like the Dow and S&P 500 are heavily skewed toward large- and mega-cap companies. According to FBN Securities' J.C. O'Hara, the average stock in the Russell 2000 and Nasdaq Composite, which include many small-cap companies, is down by more than 20% from its 52-week high.